Many consumers who responded to a recent Fannie Mae survey no longer feel it is a good time to buy real estate. The data comes from the most recent Fannie Mae (OTCQB: FNMA) Home Purchase Sentiment Index® (HPSI).
The percentage of respondents who say it is a good time to buy a home decreased from 47% to 35%, while the percentage who say it is a bad time to buy increased from 48% to 56%. As a result, the net share of those who say it is a good time to buy decreased 20 percentage points month over month.
“The HPSI remained relatively flat in May, although some of its underlying components shifted significantly, with consumers feeling substantially more positive about their jobs and income, while at the same time showing even greater pessimism about home buying conditions compared to last month,” said Doug Duncan, senior vice president and chief economist. “The ‘good time to buy’ component fell further — hitting another all-time survey low – as consumers appear to be acutely aware of higher home prices and the low supply of homes, the two reasons cited most frequently for that particular sentiment.”
However, Duncan pointed out that consumers do appear more intent to purchase on their next move, a preference that may be supported by the expectation of continued low mortgage rates, as well as the elevated savings rate during the pandemic, which may have allowed many to afford a down payment.
The percentage of respondents who say it is a good time to sell a home remained unchanged at 67%, while the percentage who say it’s a bad time to sell decreased from 26% to 25%. As a result, the net share of those who say it is a good time to sell increased 1 percentage point month over month.
The HPSI overall remained relatively flat in May, increasing by 1.0 points to 80.0. Year over year, the HPSI is up 12.5 points.